The sanitation crisis is a major challenge the world is facing, with 2.6 billion people lacking decent sanitation facilities. The sanitation problem is more pronounced in underdeveloped countries like Kenya, where more than 8 million people, half of urban population, live in slums. The communal toilets that existed in the slums were not safe for women, and the unsanitary practices left the environment highly polluted. To address these problems, three graduates from the Massachusetts Institute of Technology (MIT) came up with a business model, and thus the company Sanergy was started. The business model included vertically integrated waste management system of five parts—build, franchise, collect, convert and transfer. The company manufactured toilets that were franchised to local entrepreneurs, and the waste collected was converted into fertilizers and electricity. The pay per use toilets provided income for the entrepreneurs and the company. These toilets improved hygiene in the slums while providing employment to several local people. People’s health improved and so did the quality of life among slum dwellers. For Sanergy team, a few challenges remained: the model needed to be scaled up and expanded to other countries to address the global sanitation crisis.

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In 2012, a three-year-old boy, a resident of a sprawling slum in the western Kenyan city of Kisumu, died after falling into an open pit toilet in the area while playing with other kids. His inconsolable mother, Nancy Anyango, said, “The waste produces a pungent smell, and when it rains, it floods our houses, and we are forced to move out. The lives of our children, too, are in danger because they play inside the filth.”1 Slums like the one in Kenya, with its deteriorating sanitation facilities, existed in most of the developing and underdeveloped countries and were home to a huge population comprising the poorer sections of society.

While to most people, such abysmal sanitation facilities were an indication of a human-rights crisis, to David Auerbach (Auerbach), a Massachusetts Institute of Technology2 (MIT) graduate, they also appeared to be a social entrepreneurial gold mine. The scale of the sanitation problem prompted this young social entrepreneur to start a social enterprise, Sanergy, along with some of his fellow students. In January 2010, with support from an award they won at MIT, Auerbach and his founding team arrived at the Kenyan capital of Nairobi to address the dangerous and intractable problem of sanitation plaguing urban slums. The move raised several questions: Is sparking entrepreneurialism a way to combat the sanitation crisis? What should the business model of a company addressing this issue be? And can such businesses remain sustainable in the long run?